Saab Chairman, Victor Muller, addressed the assembled Saab workforce at 12:30pm today.
UPDATE: Notes from Victor Muller’s address are now posted below.
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Notes from the address by Victor Muller to Saab employees – Tuesday 17 May
– Victor began the address with a heartfelt apology to staff for having put them in this position. He mentioned a commitment made to Jan-Ake Jonsson when they made the Saab purchase that they would not let this company slide and he is very mindful of that commitment. Of course, this is a different situation to the purchase, however, because now Saab are their own masters.
– “I got us here. I’ll get us out”. There was a definite feeling of personal responsibility in the address.
– VM was heartened by the good news that Saab has received through this situation, the reviews of the Saab 9-4x from the drive event in Washington DC, in particular. Whilst it’s been a bad time for Saab, there have been encouraging things happening on the product side.
– In speaking about press coverage of the situation, VM said that whilst the press have applied a high level of scrutiny to Saab, the only reason they’ve been able to do this is because we gave them the opportunity to do so.
– On the collapse of the Hawtai deal, VM indicated that there were a number of potential suitors at the time the deal was done. Hawtai had great potential but the deal was ultimately thwarted by the regulatory structure and the challenges that would provide to getting the deal done in a timely manner. Indicated that Hawtai executives were heartbroken when they had to advise that they couldn’t complete the deal.
– The collapse of this deal was quite unfortunate, but it did give Saab the opportunity to learn from it and construct a better deal second time around.
– Pang Da will make for an incredibly good partner and their focus on sales and distribution should mean more business for Saab, plus the opportunity to execute parts of the deal straight away such as the commitment to purchase cars straight away. Buying cars is Pang Da’s business and does not require regulatory approval, which is the benefit of this deal for Saab at this time.
– It is too early to say what the medium-long term ramifications of the recent stoppage will be for Saab, but as well as challenges, there are also opportunities and the deal with Pang Da presents such opportunities.
– The required negotiations with suppliers, as well as supplier ramp-up time mean that it could take several weeks for production to recommence.
– VM is mindful of the fact that Saab operates in a glasshouse environment, where everyone is watching what we are doing. We have to take steps and build strength in the organisation so that we are protected from this sort of situation ever happening again.
– As with the sale process from GM, the recent situation has demonstrated the loyalty and commitment of Saab employees once again. VM expressed a profound gratitude for their loyalty and vowed to reward it with a healthier company. He will continue to source deals and partners that can assist in building stability into the Saab business.
Trollhättan, Sweden – Spyker Cars N.V. (Spyker) announces today that Spyker and Saab Automobile AB (Saab Automobile) signed a Memorandum of Understanding (MoU) with Pang Da Automobile Trade Co., Ltd (Pang Da), China’s largest publicly traded automobile distributor with over 1100 dealerships nationwide. The MoU includes a strategic alliance consisting of a 50/50 distribution joint venture and a manufacturing joint venture (MJV) for Saab branded vehicles as well as for an MJV-owned brand (the so-called ‘child brand’) in China. Saab Automobile will have up to 50 percent in the MJV, with Pang Da and a to-be-selected manufacturing partner owning the remaining shares.
Pang Da shall make a EUR 30 million payment for the purchase of Saab vehicles and is expected to make an additional EUR 15 million for the purchase of more Saab vehicles within 30 days subject to certain circumstances. Additionally, Pang Da will take an equity stake in Spyker for a total amount of EUR 65 million at EUR 4.19 per share (the weighted average of the ten last trading days), representing 24 percent of Spyker on a fully diluted basis, and will have the right to nominate a member of the Supervisory Board of Spyker and /or the Board of Saab Automobile.
Spyker, Saab Automobile and Pang Da signed an MoU on the formation of a joint ventures with respect to distribution and manufacturing in the Greater China market, subject to definitive transaction documentation and certain regulatory approvals.
Pursuant to the MoU, Pang Da will transfer EUR 30 million to Saab Automobile as payment for the purchase of Saab vehicles and an additional EUR 15 million within 30 days for the purchase of additional vehicles depending on certain circumstances.
Pang Da will take an equity participation in Spyker for a total amount of EUR 65 million at EUR 4.19 per share representing up to 24 percent of Spyker’s outstanding share capital on a fully diluted basis.
The MoU between Spyker, Saab Automobile and Pang Da contains the principles on which the parties will establish a 50/50 joint venture for the distribution of Saab-branded vehicles in China.
Zeewolde, The Netherlands, 12 May 2011 – Spyker Cars N.V. (Spyker) announces today that Hawtai Motor Group Company Limited (Hawtai) and Spyker terminated the agreement by and between Hawtai, Spyker and Saab Automobile AB (Saab Automobile) with respect to funding and strategic partnership. However, discussions are ongoing.
As a result of this termination, Saab Automobile may enter into a strategic partnership with Hawtai or another Chinese party on manufacturing, technology and distribution in China. As indicated in the press release of 3 May 2011, the transaction with Hawtai was subject to definitive transaction documentation and certain conditions, which included the consent of different stakeholders. Since it became clear that Hawtai was not able to obtain all the necessary consents, the parties were forced to terminate the agreement with Saab Automobile and Spyker with immediate effect. The parties will continue their discussions about a possible cooperation, however now on a non-exclusive basis.
Spyker and Saab Automobile continue to work on securing short and medium term funding. To that end Spyker and Saab Automobile are negotiating equity and debt financing and/or technology licensing with various (strategic) Chinese partners.
BAIC indicated that it does not have any problems with Saab’s ongoing discussions with other Chinese partners.
Discussions continue with the European Investment Bank (EIB) on completion of the current EUR 29 million drawdown under the EIB loan facility, on obtaining EIB consent for the sale of Saab property released under the collateral of the Swedish National Debt Office (NDO) and on various conditions proposed by the EIB. As soon as the EIB drawdown or other equivalent funding is confirmed, Saab Automobile plans to restart production depending on the outcome of discussions with its suppliers on terms to resume supplies of materials and services to Saab Automobile.
Trollhättan, Sweden: Saab Cars North America today announced the appointment of a new president and chief operating officer, Mr. Timothy Colbeck. The announcement comes as Saab is embarked on its biggest-ever product offensive with four all-new products since 2010 – the all-new Saab 9-5 Sedan, Saab’s first crossover, the 9-4X, the 9-5 SportCombi and the 9-3 Griffin range.
Effective Monday, May 9, Mr. Colbeck will oversee Saab’s largest market, North America. He will report directly to Saab Automobile Vice President and Head of Global Sales & Aftersales, Matthias Seidl and the Saab Cars North America Board of Directors.
Mr. Colbeck joins SCNA with 25 years of automobile industry experience in the United States with Subaru of America. Most recently he was the senior vice president sales. Under Tim’s direction, Subaru of America achieved record sales and market share in the last two years and was the only brand to achieve sales increases in each of the last three years. During his career at Subaru, Tim has been in various executive roles, with experience in sales, e-business, finance and fixed operations.
“Tim’s impressive accomplishments during his automotive career in rebuilding the Subaru brand are invaluable to the Saab team and represent his ability to further Saab’s vision for success,” said Matthias Seidl, Vice President and Head of Global Sales and Aftersales. “We are pleased to have Tim join our North American team during such an exciting time for Saab Cars North America and we are confident Tim will help increase our brand image and sales.”
I’m playing catchup here, having just arrived back in Australia.
While I was in transit, representatives from Hawtai Motor Group arrived in Trollhattan and toured Saab’s factory. At the same time that was happening, Saab were recommencing limited production aimed at making sure that everything was working OK on the production line. Full production should recommence in the next week, though an exact date hasn’t been tied down as far as I know.
The following was in my inbox when I got home, for distribution here in Inside Saab:
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Yesterday the production staff were on site to get information and to conduct a test run of factory equipment and build a small number of cars. Production manager, Stig Runesson, says that the activities were successful from several perspectives.
“I think most people appreciated getting to work, to get information and to touch materials and cars again. We chose to run a part of the test batch of cars during the Hawtai visit to give our guests a chance to see how things work here and it went very well.”
The purpose of the limited production run was primarily to test the equipment. Some maintanence work has been done as well as re-balance work, installations and completions, before the production start of the Saab 9-5 SportCombi and model year 2012. A test run like this is very valuable before the coming production start.
“In the tooling workshop we are now running try-outs and adjustments of certain tools. In the Body Shop we focus on getting the right dimensions and measures of the SportCombi and in the other shops we are have maintenance ongoing, and also improvement activitites with focus on quality. These tasks are handled with a limited number of employees on site,” says Stig Runesson.
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It would have been great to see come cars coming off the line once again. I’m going to enjoy reporting from home, but it’ll be great to get back to Trollhattan again and see Saab doing what they’re meant to be doing – building great cars.
Following are a number of questions and answers that I know are on people’s minds with regards to the recent deal Saab struck with Hawtai Motor Group, from China.
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Q: What does this deal mean for the financial future of Saab Automobile?
This agreement with Hawtai, along with the convertible loan agreement with Gemini, means that Saab has effectively satisfied it’s short-medium term funding needs. This is subject to certain conditions, of course, but we believe these conditions should be met OK. A big part of our financial future involves the building and selling of Saab cars and we’re working hard with our suppliers in order to begin production as soon as possible. There will be a limited amount of production tomorrow (Thursday 5th May) and we hope to build on that progressively though the next week.
Q: Will this deal change the ownership structure of Saab and Spyker?
Saab is owned by Spyker and that will not change. What will change is the ownership structure of the parent company, Spyker Cars NV. Hawtai Motor Group will become a large minority shareholder in Spyker Cars NV, signing up for a 29.9% stake in the company. These will be new shares, which is why it’s fresh funding into the company. If Hawtai’s stake ends up being more than 29.9% based on the agreed price and capital contribution, they will sell the excess to an independent third party (or parties) in order to get under the 29.9% cap.
Q: The agreement is subject to consent from certain Chinese governmental agencies, the European Investment Bank, the Swedish National Debt Office and General Motors. So how ‘done’ is this deal really?
A: The agreement is indeed subject to a number of regulatory approvals, but we don’t foresee any obstacles to it being approved, and we expect the deal to be completed in a timely manner.
Q: Why did Saab choose Hawtai as a partner? There were reports that you were also talking to other Chinese car manufacturers.
A: Spyker and Saab have held exploratory talks with several prospective partners in recent times. Each potential partner had its merits, of course. In the end, Hawtai was seen as the best fit and we’re convinced that our mutual interests are served best through this agreement.
Q: What’s the brief on Hawtai? Who are they and how big are they?
A: Hawtai is a privately owned, premium Chinese car manufacturer. They have 4600 employees at the moment, including 120 foreign workers giving expert advice on their development. There are many similarities between Hawtai and Saab, with both companies being of a similar size and with a growing sales volume. Hawtai have invested significantly in the expansion of their production capacity and now have the facilities to build 350,000 cars, 300,000 diesel engines and 450,000 transmissions.
Q: What does this agreement mean for Saab’s plans to produce cars in China?
A: The agreement that’s been signed between Spyker and Hawtai includes both production and distribution of Saab branded vehicles in China. Saabs for the Chinese market will be mostly produced in China, which is an essential and cost-effective solution to gaining a better footing into the world’s biggest car market. More details on which models will be produced, imported and exported with regards to China will be forthcoming at a later date.
Q: There is a technology sharing agreement as part of this deal. What does that mean?
A: Both Saab and Hawtai have technologies and expertise in fields that could be of interest to one another. We’re confident that both parties will benefit from this partnership as time progresses. However, at this point we can’t provide any more specific detail as to what would be shared, nor what model vehicles any technologies might apply to.
Q: Can you say any more about the joint ventures of manufacturing and distribution that were mentioned in the press surrounding this deal?
A: The proposed set-up is currently being reviewed by our financial and legal team, so we have an agreement in principal, you could say, but we expect the details to be signed off in due course. It includes a joint venture for manufacturing and one for distribution of both imported and locally produced vehicles.
Q: What about CATC? Several months ago, Saab signed them up to take care of distribution in China.
A: We have to be mindful here of the distinction between importing and distribution. CATC will still be responsible for the importation of Saab vehicles into the Chinese market. Together with Hawtai, Saab will distribute the vehicles and set up manufacturing, too. This arrangement will complement our current agreement with CATC.
Q: Now that you have secured financing, how will you win back confidence in the marketplace? How can you convince people that this will not happen again?
A: With the current agreements in place (Gemini and Hawtai), we believe that we will be able to stabilise operations and restart production, which is the essential first step. Saab and Spyker are totally committed to restoring confidence amongst our employees, dealers, suppliers, customers and other stakeholders as soon as possible and we are working hard towards achieving that. In the end, it all comes down to product and we believe that our new products will be well received, but we know that have to work hard to give them the visibility they need in the marketplace.
Q: How do the deals announced this week effect the intentions of Vladimir Antonov? Is he still a candidate to become a shareholder in Spyker?
A: Mr. Antonov has consistently stated that his intention is to become an investor in Saab/Spyker and that has not changed. After recently receiving approvals from the National Debt Office here in Sweden, as well as General Motors, Mr. Antonov is now awaiting approval from the Swedish government and the EIB.
Q: What about Saab’s business plan? Is that up for review after recent events?
A: Spyker and Saab stated on March 29 that they would review their full-year targets. Whilst we’re encouraged by the support we’ve received (we have an order book of approximately 5,000 vehicles awaiting production when we restart), it would be reasonable to assume that previously communicated targets will not be met given recent events. At this moment it is too early to tell what the exact consequences of those recent events will be for the confidence in our company, or to give a new forecast.
Zeewolde, The Netherlands, 3 May 2011 – Following yesterday’s announcement that Spyker Cars N.V. (Spyker) secured its short term funding, Spyker announces today that Spyker and Saab Automobile AB (Saab Automobile) signed an agreement with Hawtai Motor Group Company Limited (Hawtai). This agreement conditionally secures medium term funding and includes financing in the form of subscription agreements in the amount of EUR 150 million as well as a strategic alliance for China including joint ventures on manufacturing, technology and distribution.
Spyker, Saab Automobile and Hawtai sign agreement on strategic alliances partnership with respect to manufacturing, technology and distribution in China, subject to definitive transaction documentation
Spyker will enter into a subscription agreement with Hawtai in the total amount of EUR 120 million for in aggregate 24.6 million shares as well as a EUR 30 million convertible loan, subject to definitive transaction documentation and certain conditions.
As a part of the transaction Hawtai will invest EUR 120 million for up to a maximum of a 29.9 percent equity stake in Spyker on a fully diluted basis. The remaining EUR 30 million will be in the form of a convertible loan agreement in the amount of EUR 30 million with a 6 month maturity, an interest rate of 7% per annum and a conversion price of EUR 4.88 per share. The transactions are subject to agreement on definitive transaction documents and certain conditions, which include consents from certain Chinese governmental agencies, the European Investment Bank and the Swedish National Debt Office. As part of the transaction, Tenaci Capital will convert EUR 42 million of its current loan to Spyker into share capital in Spyker at EUR 4.88 per share, thereby substantially reducing Spykers interest burden.
Victor Muller, CEO of Spyker and Chairman of Saab Automobile said:
“The partnership with Hawtai allows Saab Automobile on the one hand to continue executing its business plan since we secured the required mid-term financing subject to meeting certain conditions, whilst on the other hand it allows Saab Automobile to enter the Chinese car market and establish a technology partnership with a strong Chinese manufacturer.
We expect that Saab’s unique brand values based on its aviation heritage, Scandinavian origins and innovation-driven character will do very well in the Chinese market. Our driver-oriented vehicles appeal to a whole new group of independently thinking customers who appreciate Saab’s advanced designs, safety and responsible performance.
With Hawtai’s clean diesel engine technologies and production capacity, and its ambitious development programs, we have found the right partner to develop the Saab business and build a solid relationship.”
Mr Richard Zhang, Vice President of Hawtai, said:
“This is a great day for our relatively young company which was founded ten years ago. The partnership with the iconic Saab brand will give us access to innovative technologies and an international network which would have taken us decades to build. On the other hand we have a very strong Chinese manufacturing and distribution infrastructure which we will make available to our new partner Saab Automobile. Our participation in Spyker, Saab’s parent company, demonstrates our commitment to the future of Saab Automobile as a premium European car manufacturer.”
Founded in 2000, Hawtai is a China-based privately-owned automotive company with its headquarters and R&D centre located in Beijing, and two production facilities located in Ordos, Inner Mongolia and Rongcheng, Shandong Province. Hawtai currently has an annual production capacity of 350,000 vehicles, 300,000 clean diesel engines and 450,000 automatic transmissions. By 2015, Hawtai aims to have raised this capacity to 1 million vehicles, 1 million engines and 1 million automatic transmissions, and to have established itself as a global leading automotive company.
For those who haven’t heard yet, Saab has secured short term financing in the order of EUR 59.1million to re-start production at the factory. We are also set to announce a strategic partnership with Hawtai Motor Group, from China. The nature of that partnership is yet to be revealed, however such an announcement can only bring positive benefits for Saab Automobile.
I was in a meeting this afternoon when the short term funding announcement was made and I can tell you that the dual feelings of relief and excitement in the offices at Saab was palpable.
As an enthusiast, I’ve commented several times to the effect that there was no way that I could imagine this company going down. As with the sale from General Motors, there was just too much excellent product in the pipeline – product that is now imminent – and too many interested parties for that to happen.
That’s not to say, however, that the company hasn’t been stretched in an almost unreal manner over the last few weeks.
The factory hasn’t produced a single vehicle since I’ve moved here to Sweden to commence work with Saab. That’s a difficult scenario both for the workers idling at home and the office staff trying to function as usual, making plans for when things get better. It would have been easy to take a doomsday type attitude in the last week, for people to drop their heads and lose some hope. All I’ve seen, however, are people 200% committed to making this company work.
A lot of people have asked me what got Saab into this situation and the honest truth is that I just don’t know. I wouldn’t tell you if I did – that’s a job for someone with greater responsibilities than mine – but I simply don’t.
What I do know is that all the people I’ve met who work for this company, love working for this company. And those are exactly the people we want. My colleague in Saab’s social media area left a more secure job at Ikea to work for Saab. I know guys back in Australia who have come from Mercedes Benz and BMW to work for Saab. People want this company to succeed and they want to be a part of it. Now we have to execute.
We know that the Saab community gets passionate about this brand and we have to be just as passionate about developing, selling and serving the best we can. We have to prove to our customers, our dealer network and most importantly, our suppliers, that we have what it takes to succeed.
We believe the range is in place. Sales of the 9-5, in prior and more ‘normal’ conditions, were growing slowly but surely and the key model for Europe, the SportCombi, is on its way. The Saab 9-4x is already receiving extremely encouraging reviews and more press is on the way next week after a short-lead press introduction in the United States. Finally, the 9-3 Griffin – like wind-up models before it – is the best iteration of the Saab 9-3 that we’ve ever made. It still looks absolutely fantastic and the addition of the new direct injection engine will give the model a new lease of life. And don’t forget the low-emission 9-3 diesels that free owners up from road taxes in a number of countries in Europe.
With the range in place, it will be time for us to execute. I know there are things that need work in my particular area of interest (the web) but I also know that upgrades in that area are coming very, very soon. I know that we have very creative people looking at the best ways to promote our vehicle range in a way that gives us great value for money and will offer the opportunity for great experiences for the public.
We need to play our part, and we will. We also need you to play your part. We have a good order book ready and waiting for the factory re-start, which is very encouraging. Of course, we’ve always got room for more 🙂 .
Thanks for your support and your interest in Saab already. This company just keeps on fighting and we couldn’t do it without you.
Saab Automobile and Hawtai Motor Group invite journalists to attend a press conference on May 3, 2011, for the unveiling and signing of an exciting strategic partnership between both parties.
The press conference will take place at 14:30 Beijing time (08:30 CET) in the Jinmao Ballroom (3rd Floor) at The Westin Beijing Chaoyang, 7 North Dongsanhuan Road, Chaoyang District, Beijing, 100027 China.
During the press conference both Mr. Victor Muller, Chairman of Saab Automobile, and Mr. Richard Zhang, Vice President of Hawtai Motor Group, will address the media and be available for questions.
I think the appropriate phrase is yeeeeeeeeee-haaaaa!
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Zeewolde, The Netherlands, 2 May 2011 – Spyker Cars N.V. (Spyker) announces that it secured the short-term funding of Saab Automobile AB (Saab Automobile) by entering into a EUR 30 million convertible loan agreement with Gemini Investment Fund Limited (Gemini).
Spyker entered into a EUR 30 million convertible loan agreement with Gemini with a 6 months maturity. The interest rate of the loan is 7% per annual and the conversion price is EUR 4.88 per share.
In addition to the receipt of EUR 30 million from Gemini, Saab Automobile will make a drawdown request to the EIB for an amount of EUR 29.1 million. As a result of the convertible loan and the EIB draw down – which is expected next week – Saab Automobile secured an amount of EUR 59.1 million. With the receipt of these funds, Saab Automobile secured the liquidity that is required to restart production.
Saab Automobile aims to restart production within a week, pending agreements on delivery schedules with its suppliers. In order to improve lead times to customers and dealers on existing and future orders, Saab Automobile will work together with its suppliers to minimize any impact from the recent production stop.
Spyker and Saab Automobile continue to work on securing medium and long term funding.
Victor Muller, CEO of Spyker and chairman of Saab Automobile said:
“I would like to apologize to our dedicated employees,suppliers, dealers and customers for the disruptions of the past weeks. We will do everything in our power to restore the confidence in our company as soon as practically possible.”
